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RPM Blog

The RPM Auto Wholesale Blog provides tips for buying and selling vehicles, humorous stories and narratives from the underbelly of the automotive industry.

What's My Car Worth?

Your vehicle is worth whatever somebody will pay you for it!

Like it or not, it's true.  The answer is not a flip response to the question, but the only answer possible until you know the buyer group that you choose to buy your vehicle.  Your first goal should be to determine which buyer group you are targeting and then to rephrase the question so that it includes your target buyer group.

Your vehicle is valued differently by the three primary groups who buy used cars.  Let's take a look at the three different groups of buyers, how to market your vehicle to each group and the amount of time and effort required if you are to realize the best sale price to each group.  Generally speaking, the higher the value you are seeking for your automobile, the more time, energy and aggravation you will need to expend to reach your desired outcome.

Once you know the buyer group you are willing to target, you can turn to the question of how much cash you should expect from a sale of the vehicle and how to determine that value.

The 3 primary groups of buyers of used vehicles include: retail auto dealers, private parties and wholesale auto dealers.  First, we'll take a look at the difference between the groups and then turn to the expected sale price for each group.

Retail Auto Dealers

  • Traditionally sought out for ease of disposal of the used car when purchasing a replacement vehicle.
  • These buyers are easy to find but not so easy to deal with: especially if you are not buying a new car from them.
  • Haggling can be tiring.
  • Mixing the sale of the old car with the purchase of the new car makes it difficult to separate what are truly two separate transactions.
  • Typical time to sell old vehicle is two to four days.
  • Common term used to describe price dealer offers is trade-in value.
  • Price dealer offers can vary wildly from dealer to dealer as their need for your trade changes from one dealer to the next.
  • Usually receive highest value when buying the same brand as the brand being traded.
  • Limited transparency.  Need to visit showroom to obtain a value from them.

Wholesale Auto Dealers

  • This side of industry still relatively unknown.  Internet has extended their reach from dealer only access to access by the general public.
  • Easiest buyer group to reach and transact business with.
  • Usually no need to haggle.  Offer given freely by phone, internet and email.
  • No mixing of purchase and sale as these buyers typically do not sell vehicles to the public.
  • Typical time to sell vehicle is from a few hours to a few days.
  • Commonly these buyers will pay the trade-in value for the vehicle.
  • Complete transparency as offer is freely given to the seller from the comfort of the seller's own home.
  • Some Retail Auto Dealers are posing as an easy to use alternative to the trade-in.  Seller must visit dealer showroom for a price commitment!
  • No need to repair or clean vehicle prior to sale.

Private Party Buyer

  • End user of automobile.  Looks to purchase reliable vehicle for personal daily use.
  • Difficult buyer group to reach and find.
  • Negotiations typically protracted and can be complicated especially if there is a lien on the vehicle being sold.
  • Will often times try to bargain for vehicle purchase close to the trade-in value as nobody wants to pay retail.
  • Term used to describe purchase price from this group is private party price.
  • Typical time to sell vehicle to this group is from 2 to 4 months.
  • Seller usually most successful if vehicle is fully repaired and detailed prior to listing for sale.

Whether you are selling privately, trading in to a dealer, selling to a wholesale buyer or just plain curious about what your car is worth, it is important to know how to get an accurate valuation. Fortunately, there is no shortage of websites devoted to providing this information.  As you will see later in this post, there is a great deal of variation in the pricing that comes from each of the sites listed below.  This is partly due to the methodology used by each to produce their pricing models. Keep in mind that most derive a substantial if not lion's share of their revenue from Retail Auto Dealer advertising and paid inclusion in listings on the site.  It's best to keep an open mind and do a lot of sleuthing at each site to determine how relevant and accurate their data really is.

When using these sites it's equally important to be as accurate as possible about the condition of your vehicle.  Otherwise, you are walking away with an unrealistic valuation for your vehicle and you will expend a great deal of energy and aggravation trying to sell your car for an unrealistic price.

In no particular order of importance some of the more popular sites include: Edmund's TrueMarketValue, Kelley Blue Book, Cars.com powered by Black Book, RPM's Fair Value and NADAguides Used Car Values.  Our personal favorites include Black Book and Edmund's.  Our experience has taught us that the prices obtained from these two sites will provide you with the most relevant pricing data.

Pricing Models Put to the Test
We decided to test drive the 5 sites listed above to learn how they compared to each other in terms of valuing a popular used car.  For our test, we chose a 2010 Honda Accord LX Model 4DR 4 Cylinder Automatic with no extra equipment and 60,000 miles in a white color.  We used the zip code of our office location which is 94607 and we conducted our survey on May 12, 2015.  Here's what we learned.

  Edmund's   KBB  Black Book NADA  RPM   Average Value
Rough Trade-In   $6,926  $9,156  $6,655 $9,250   $8,100  $8017
Average Trade-In   $8,168  $9,767 $8,945   $10,400  $8,500  $9,156
Clean Trade-In   $9,947  $10,233  NA  $11,325  $9,200  $10,176
 Rough Private Party
 $7,882  $10,492  $8,400  NA  NA  $8,925
 Average Private Party  $9,265  $11,131  $10,550  NA  NA  $10,315
 Clean Private Party  $11,246  $11,619  NA  NA  NA  $11,433

Understanding the Price
Regardless of the websites you use to appraise your vehicle, you will be given some valuable information to help you make an informed decision of which sales method best suits your personal lifestyle and temperament.  If you visit all 5 listed above, a very clear picture of your used vehicle's valuation will begin to emerge.  With a clear and honest assessment of your vehicle's condition and a range of prices such as those shown above, a clear path to selling your old car will begin to emerge.

When you know the buyer group you are going to target and are equipped with a realistic understanding of what it takes to market your vehicle to each of the three groups, you will be able to know the answer to the question; "What's my car Worth?"

It's Easy To Be Real

Getting a realistic valuation for your used car is key to what you do next.  Whether you choose to sell to a private party, trade it in, sell to a wholesale dealer or even keeping it for a while longer, having knowledge gives you the power to make the intelligent choice for your personal situation. By being honest about your vehicle's condition, you'll have a clear-eyed assessment of your car's real worth, not a number based on guesswork and high hopes.

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